AMP Limited (AMP):
Former AMP chairman Catherine Brenner’s two remaining blue-chip boards continue to back her, despite AMP’s handling of its fees-for-no-service scandal that led to her resignation on Monday. Both Coca-Cola Amatil and Boral said they retained confidence in Ms Brenner and had not changed their position over the recent events at AMP. A spokesman said Ms Brenner retained the confidence of the board, and the imbroglio at AMP had not changed anything. While the Amatil annual meeting is on May 16, Ms Brenner is not up for re-election as she last faced shareholders in 2016. Shareholders will therefore determine her fate in May next year.
JB Hi-Fi Limited (JBH):
JB Hi-Fi shares plummeted 10 per cent after the consumer electronics giant cut its profit forecast for fiscal. The shares in the market darling immediately hit the skids as chief executive Richard Murray broke the bad news at the Macquarie Australia Conference, stripping almost $250 million from its market capitalisation as the shares dived to five-month lows. The shares later closed down nearly 9 per cent at $23.32, the stock’s biggest single-day fall since 2011. Once again The Good Guys, bought by JB Hi-Fi for $870m in 2016, has been the cause of pain for JB Hi-Fi shareholders, with the business getting off to a rocky start under its new owners as a slew of management changes, tough trading conditions and growing price competition shaved earnings from the appliances, white goods and electronics retailer. The retailer warned that as a result of this the company now expected total group net profit for fiscal 2018 to be around $230m, against previous forecast of $235m to $240m.
National Australia Bank Ltd (NAB):
The $3 billion sale of its MLC business will help NAB’s Andrew Thorburn simplify the bank but his major problem is the same one facing the rest of the industry, slowing growth. Right now the economy is stuck in a low growth outlook, with the prospect of post royal commission controls set to slow growth even further through the tightening of lending standards. As an aside, NAB disclosed the banking royal commission would cost it $40 million this year compared with $50 million at ANZ. NAB is talking about cost growth over the next few years of as much as eight per cent, or $1.5 billion, for long term cost savings of $1bn a year. Bank Generics NAB to offload MLC wealth arm SAMANTHA BAILEY. The bank is set to cut 4,000 people from the 33,000 employed in 2017 and staff accounts for 58 per cent of costs so you would think the savings would be greater. Maybe the bank was hoping for better revenue growth to offset the investment cost increases but that doesn’t look like happening any time soon.
Qantas Airways Limited (QAN):
The market for corporate travel was “doing really well”, Qantas boss Alan Joyce declared as the airline revealed it expected to post a record underlying pre-tax profit this year. Qantas shares surged to close 47c higher at $6.27 after the marquee Australian carrier said it expected an underlying pre-tax profit of between $1.55 billion and $1.6bn — eclipsing the $1.53bn reported for 2016. Qantas has flagged the strong result despite the recent resurgence of the oil price, which is expected to add $200 million to the fuel bill this year. The carrier foreshadowed a further benefit to shareholders enjoying the company’s turnaround effort, saying the board would consider further capital management initiatives when the full-year results were delivered in August. For the third quarter, group revenue was up 7.5 per cent at $4.25bn from the same period in the previous year. For the group’s domestic unit, comprising Qantas and Jetstar domestic operations, revenue was up by 8 per cent as demand was buoyant across key markets and the resources sector continued to recover. Again underscoring the climate since the bruising capacity war with Virgin ended, the carrier said group domestic capacity had decreased by 1.9 per cent for the quarter.
QBE Insurance Group Ltd (QBE):
Insurance group QBE has significantly cut back its offshore operations in Asia and the Americas in the wake of last year’s statutory net loss of more than $US1.2 billion. This has included the recent sale of its loss-making operations in Latin America to Zurich Insurance for $409 million. Mr Regan said the company was also taking steps to exit its personal lines insurance business in North America. In Asia, it has recently sold its loss-making business in Thailand and entered into a “loss portfolio transfer agreement” deal with reinsurance group Swiss Re in relation to $200 million of workers compensation reserves in the construction industry in Hong Kong. QBE’s results for 2017 were hit by the fallout from its highest ever catastrophe losses, with net catastrophe losses of $US1.2 billion compared to only $US439 million in 2016. Its statutory financial result was also hit by a $US700 million writedown of goodwill on its North American operations as well as a $US230 million writedown of deferred tax assets in its North American operations as a result of President Trump’s cut in the US corporate tax rate.
Rio Tinto Limited (RIO):
Rio Tinto chairman Simon Thompson says a worsening coal outlook because of climate change has played a big part in the miner’s decision to sell out of its NSW thermal coalmines. This is the first time the company has linked its exit from coal to environmental concerns. He told the AGM that the decision to sell the Hunter -Valley thermal coal assets to Yancoal Australia and Glencore for $US2.69 billion ($3.58bn) was based purely on value. At the AGM, a motion put by the Australasian Centre for Corporate Responsibility and supported by shareholders, including Local Government Super and the Church of England, for Rio to review the climate change policy of industry groups it funds including the Minerals Council of Australia, was voted down.
Santos (STO):
Santos chairman Keith Spence says dividends may be back on the agenda early next year after the company sold its Asian assets to Ophir Energy for $US221 million, helping it pay down debt quicker than expected. The chairman has also stressed a $13.5 billion bid by US private company Harbour Energy’s may not be approved by the board. Mr Spence said Santos (STO) was set to meet a $US2bn debt repayment target early in the second half of this year, well ahead of its announced time frame of the end of 2019. “If the performance of the business continues on this trend and current oil price levels are sustained, the board will look to restore dividends based on 2018 financial results,” he told the company’s annual general meeting in Adelaide. “Our view is that the dividend policy most suitable to Santos’ capital structure is to return to a base sustainable dividend that will be relatively stable over time.”
Super Retail Group (SUL):
Super Retail Group shares shot up as much as 9 per cent after the company says its full-year earnings will likely be in line with the prior year, as it gave a sales update for the first 17 weeks of the second half at the Macquarie Securities conference today. Analysts said the betterthan-expected margins and single digit sales increase across a number of brands drives an implied earnings before interest and tax of about $220 million, above consensus forecasts of $215m. They said the stock had been de-rated on the back of the Macpac acquisition and challenging leisure market conditions impacting BCF, but said that in Citi’s view, the strength of the auto business had been overlooked. The company’s Supercheap Auto business achieved a like-for-like sales growth of 4.4 per cent for the first 17 weeks of the second half and up 3.9 per cent year-to-date to April 28. Rebel sales were up 2.2 per cent for the period an up 1.5 per cent year to date.
Wesfarmers Ltd (WES):
Wesfarmers chief executive Rob Scott has flagged more Target stores could be closed or rebranded to Kmart as part of the strategy to revive the struggling chain. In a speech to the Macquarie Connections conference, Mr Scott conceded Wesfarmers remained disappointed with Target’s financial performance, even though it was still profitable. Target will remain in the Wesfarmers portfolio once the industrial conglomerate demerges Coles as a separate company that will be listed on the Australian Securities Exchange. In February, Wesfarmers said that poor trading would force a non-cash impairment of $306 million before tax to be applied against the carrying value of its brand name ($238m), remaining goodwill ($47m) and property and equipment ($21m). The move prompted Target to report earnings before interest and tax of $33m, which was a 13.8 per cent increase from a year -earlier.
(Source: AIMS)
Former AMP chairman Catherine Brenner’s two remaining blue-chip boards continue to back her, despite AMP’s handling of its fees-for-no-service scandal that led to her resignation on Monday. Both Coca-Cola Amatil and Boral said they retained confidence in Ms Brenner and had not changed their position over the recent events at AMP. A spokesman said Ms Brenner retained the confidence of the board, and the imbroglio at AMP had not changed anything. While the Amatil annual meeting is on May 16, Ms Brenner is not up for re-election as she last faced shareholders in 2016. Shareholders will therefore determine her fate in May next year.
JB Hi-Fi Limited (JBH):
JB Hi-Fi shares plummeted 10 per cent after the consumer electronics giant cut its profit forecast for fiscal. The shares in the market darling immediately hit the skids as chief executive Richard Murray broke the bad news at the Macquarie Australia Conference, stripping almost $250 million from its market capitalisation as the shares dived to five-month lows. The shares later closed down nearly 9 per cent at $23.32, the stock’s biggest single-day fall since 2011. Once again The Good Guys, bought by JB Hi-Fi for $870m in 2016, has been the cause of pain for JB Hi-Fi shareholders, with the business getting off to a rocky start under its new owners as a slew of management changes, tough trading conditions and growing price competition shaved earnings from the appliances, white goods and electronics retailer. The retailer warned that as a result of this the company now expected total group net profit for fiscal 2018 to be around $230m, against previous forecast of $235m to $240m.
National Australia Bank Ltd (NAB):
The $3 billion sale of its MLC business will help NAB’s Andrew Thorburn simplify the bank but his major problem is the same one facing the rest of the industry, slowing growth. Right now the economy is stuck in a low growth outlook, with the prospect of post royal commission controls set to slow growth even further through the tightening of lending standards. As an aside, NAB disclosed the banking royal commission would cost it $40 million this year compared with $50 million at ANZ. NAB is talking about cost growth over the next few years of as much as eight per cent, or $1.5 billion, for long term cost savings of $1bn a year. Bank Generics NAB to offload MLC wealth arm SAMANTHA BAILEY. The bank is set to cut 4,000 people from the 33,000 employed in 2017 and staff accounts for 58 per cent of costs so you would think the savings would be greater. Maybe the bank was hoping for better revenue growth to offset the investment cost increases but that doesn’t look like happening any time soon.
Qantas Airways Limited (QAN):
The market for corporate travel was “doing really well”, Qantas boss Alan Joyce declared as the airline revealed it expected to post a record underlying pre-tax profit this year. Qantas shares surged to close 47c higher at $6.27 after the marquee Australian carrier said it expected an underlying pre-tax profit of between $1.55 billion and $1.6bn — eclipsing the $1.53bn reported for 2016. Qantas has flagged the strong result despite the recent resurgence of the oil price, which is expected to add $200 million to the fuel bill this year. The carrier foreshadowed a further benefit to shareholders enjoying the company’s turnaround effort, saying the board would consider further capital management initiatives when the full-year results were delivered in August. For the third quarter, group revenue was up 7.5 per cent at $4.25bn from the same period in the previous year. For the group’s domestic unit, comprising Qantas and Jetstar domestic operations, revenue was up by 8 per cent as demand was buoyant across key markets and the resources sector continued to recover. Again underscoring the climate since the bruising capacity war with Virgin ended, the carrier said group domestic capacity had decreased by 1.9 per cent for the quarter.
QBE Insurance Group Ltd (QBE):
Insurance group QBE has significantly cut back its offshore operations in Asia and the Americas in the wake of last year’s statutory net loss of more than $US1.2 billion. This has included the recent sale of its loss-making operations in Latin America to Zurich Insurance for $409 million. Mr Regan said the company was also taking steps to exit its personal lines insurance business in North America. In Asia, it has recently sold its loss-making business in Thailand and entered into a “loss portfolio transfer agreement” deal with reinsurance group Swiss Re in relation to $200 million of workers compensation reserves in the construction industry in Hong Kong. QBE’s results for 2017 were hit by the fallout from its highest ever catastrophe losses, with net catastrophe losses of $US1.2 billion compared to only $US439 million in 2016. Its statutory financial result was also hit by a $US700 million writedown of goodwill on its North American operations as well as a $US230 million writedown of deferred tax assets in its North American operations as a result of President Trump’s cut in the US corporate tax rate.
Rio Tinto Limited (RIO):
Rio Tinto chairman Simon Thompson says a worsening coal outlook because of climate change has played a big part in the miner’s decision to sell out of its NSW thermal coalmines. This is the first time the company has linked its exit from coal to environmental concerns. He told the AGM that the decision to sell the Hunter -Valley thermal coal assets to Yancoal Australia and Glencore for $US2.69 billion ($3.58bn) was based purely on value. At the AGM, a motion put by the Australasian Centre for Corporate Responsibility and supported by shareholders, including Local Government Super and the Church of England, for Rio to review the climate change policy of industry groups it funds including the Minerals Council of Australia, was voted down.
Santos (STO):
Santos chairman Keith Spence says dividends may be back on the agenda early next year after the company sold its Asian assets to Ophir Energy for $US221 million, helping it pay down debt quicker than expected. The chairman has also stressed a $13.5 billion bid by US private company Harbour Energy’s may not be approved by the board. Mr Spence said Santos (STO) was set to meet a $US2bn debt repayment target early in the second half of this year, well ahead of its announced time frame of the end of 2019. “If the performance of the business continues on this trend and current oil price levels are sustained, the board will look to restore dividends based on 2018 financial results,” he told the company’s annual general meeting in Adelaide. “Our view is that the dividend policy most suitable to Santos’ capital structure is to return to a base sustainable dividend that will be relatively stable over time.”
Super Retail Group (SUL):
Super Retail Group shares shot up as much as 9 per cent after the company says its full-year earnings will likely be in line with the prior year, as it gave a sales update for the first 17 weeks of the second half at the Macquarie Securities conference today. Analysts said the betterthan-expected margins and single digit sales increase across a number of brands drives an implied earnings before interest and tax of about $220 million, above consensus forecasts of $215m. They said the stock had been de-rated on the back of the Macpac acquisition and challenging leisure market conditions impacting BCF, but said that in Citi’s view, the strength of the auto business had been overlooked. The company’s Supercheap Auto business achieved a like-for-like sales growth of 4.4 per cent for the first 17 weeks of the second half and up 3.9 per cent year-to-date to April 28. Rebel sales were up 2.2 per cent for the period an up 1.5 per cent year to date.
Wesfarmers Ltd (WES):
Wesfarmers chief executive Rob Scott has flagged more Target stores could be closed or rebranded to Kmart as part of the strategy to revive the struggling chain. In a speech to the Macquarie Connections conference, Mr Scott conceded Wesfarmers remained disappointed with Target’s financial performance, even though it was still profitable. Target will remain in the Wesfarmers portfolio once the industrial conglomerate demerges Coles as a separate company that will be listed on the Australian Securities Exchange. In February, Wesfarmers said that poor trading would force a non-cash impairment of $306 million before tax to be applied against the carrying value of its brand name ($238m), remaining goodwill ($47m) and property and equipment ($21m). The move prompted Target to report earnings before interest and tax of $33m, which was a 13.8 per cent increase from a year -earlier.
(Source: AIMS)
Latest comments